Google announces Q1 earnings. They’re hiring and growing. What next for the Internet giant ?

by Jeff Wiener on April 16, 2010

And they are on an upward trajectory taking the Internet world by storm.

Revenue was up by 23% to $6.77 Billion while net income rose 37% to $1.96 Billion. Paid clicks were up by 15% year over year. Surprisingly, shares were down in overnight trading by 5% as investors were expecting more !!

It certainly doesn’t appear as if Google’s growth trajectory is slowing. Their business clearly has momentum, and on the surface this appears to be great news. Great news if you’re a Google shareholder. Maybe not such great news if you’re a competitor.

Google has become too dominant. They keep growing both vertically and laterally and have destroyed many companies with their paradigm shifting business models. They continue to grow with such ferocity that their growth needs to be questioned. Google owns the Internet advertising and search world much as Microsoft owned the PC, computer, and OS market in the 1990’s. The tech world at one time feared Microsoft’s entry into new markets much as Google’s competitors fear Google’s entry into their markets.


Can they continue growing at this pace ?

I suspect not. This growth can’t continue forever. Every business reaches it’s own breaking point where it becomes difficult to scale and compete. Bureaucracy and complacency set in, and the business model becomes somewhat stale weighed down by its sheer size and inability to react to changing tides. Microsoft is a perfect example.

Google isn’t at that stage. Yet. But, to continue growing they need to find new markets and companies to purchase. And even still, once purchased, the new technology needs to add a significant volume to allow them to grow at 23% / year. All the while, the initial technology and business model itself (advertising) which lead to their initial growth in the first place, slows.

At this point I fear Google’s presence and future in the market and relish the day that a new paradigm shifting technology and business model begins. And then … the cycle will begin all over again !

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Written by: Jeff Wiener. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

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